Why the Freelance Economy Is Booming and Where It Goes From Here

Freelancing has always existed, in one form or another. But currently, we’re seeing a kind of “golden age” of the freelancer.

According to a 2016 report from the Bureau of Labor Statistics, about 15 million people in the U.S. are currently self-employed, more than 10 percent of the entire American workforce. Over the past two decades, this figure has actually diminished due to a decline in agricultural employment, but freelancing in many other areas – such as creative work, ridesharing, and micropreneurship – has been expanding rapidly.

There may be no better time to get started as a freelancer than the present, but why is this the case? Why has the freelance economy experienced such a boom?

Motivations for Freelance Growth

These are some of the biggest factors behind the boom:

Remote work availability. More than 25 percent of U.S. workers executed at least part of their job at home in 2015. Thanks to smartphones, mobile devices, and fast Internet service, it’s become practical for people to work from just about anywhere. That means more people are seeing more opportunities outside the cubicle every day, with a variety of effects. Workers can apply for more jobs, companies can scout for more people, and many professionals don’t care to be tied down to only one outlet. All of these factors contribute to the production and prosperity of increasing numbers of freelancers.

Accessibility of online resources. More and better online resources have made it easier for freelancers to launch their own businesses. Services and technologies like WordPress and Wix allow people to build websites for free, and sites like Hloom provide templates everyone can use for resumes and financial documentation. Even the federal government is making it easier to find the laws and tax information you need if you’re a freelancer.

A greater sense of independence. Distrust of corporations is at an all-time high, thanks in part to the 2008 economic recession. Americans have a greater desire for independence, and less of a sense of loyalty to their employer, than they did a few decades ago. People no longer feel required to pick a firm and stick with it for the majority of their career; instead, they feel the desire to pursue other opportunities more often.

Corporate demand for freelancing. There’s also been a rise in corporate demand for freelancers because it makes sense to them from a logistical standpoint. Freelancers are available on call, yet tend to require less compensation than full-time counterparts would. There’s a wider talent pool to choose from, and you can rely on different freelancers to handle different tasks. You don’t have to pay them benefits the way you do full-time workers. The flip side, of course, is that freelancers can be less reliable and less available. Still, it’s more than worth the trade, according to many current entrepreneurs.

Apps and micropreneur opportunities. Other opportunities abound for freelancers, thanks in part to apps and communities that make “micropreneurship” possible. Ridesharing apps like Uber enable drivers to connect with passengers and collect fares. Creative communities like 99 Designs connect entrepreneurs and marketers to designers and other talented individuals. And sites like Fiverr make it easy for people to announce their talents or skill set to the world, almost like a global classified ad. No matter who you are or what you do, there’s a niche app that can connect you to money-generating opportunities. This may be the biggest reason for the growth of freelancing – even if it’s mostly just for side gigs.

Where Does Freelancing Go From Here?

The motivational factors are useful to understand, but they don’t show a clear trend into the future. Will the freelance economy continue to grow, or might we have hit a peak already?

There are three main influencers to consider here:

Sustainability. First, there’s the sustainability of freelancing as a viable long-term career path. According to a report by TIME, one of the biggest drawbacks of the gig economy has been the disappearance of full-time benefits like health insurance and retirement programs. Companies may be able to offer a compromise in the future, but this would cost more money and reshape the economy. Otherwise, freelance workers may at some point decide that continuing freelancing is just not worth it.

Technology. Technology continues to grow more sophisticated, connecting more people to more work opportunities. That could suggest further growth in the freelance economy, especially in the near future.

Overall, there’s still room for the freelance economy to grow, at least in the short term. The freelancing community must overcome a number of obstacles, including automation and lack of full-time benefits. But in the meantime, there’s room left to run.

One comment

Technology and automation are the frontiers for the freelance economy. The limiting factors for small business are the absence of the ability to locate the target market and converting leads to buyers and repeat sales.

There is new and evolving software to assist in this challenge. The software addresses things like driving traffic to your website, subscriber list building, sales funnels, phone or email followup, educational emails and newsletters to engage new customers.

Most small businesses are not geared to apply this level of technology to their business. And so, there is a new industry springing up around the need to satisfy this growing challenge. The experts will tell you that it pays to spend money on consumer outreach in order to make money from increased sales and securing new buyers.